S e n t e n c i n g P a r t n e r s - June/July 2014 - Part I

Posted by Chris Morales on Wed, Jul 30, 2014 @ 02:19 PM

We would like to thank our friends Joaquin & Duncan, L.L.C for sharing this information with us!

U.S. Sentencing Commission Unanimously Votes to Allow Delayed Retroactive Reduction in Drug Trafficking Sentences

Congress Has Until November 1, 2014, to Disapprove The Sentencing Commission voted on July 18, 2014, to apply a reduction in the sentencing guideline levels applicable to most federal drug trafficking offenders retroactively, meaning that many offenders currently in prison could be eligible for reduced sentences beginning November 2015.

The Commission voted unanimously in April to amend the guidelines to lower the base offense levels in the Drug Quantity Table across drug types, which may mean lower sentences for most drug offenders going forward. The Commission decided that judges could extend that reduction to offenders currently in prison, but with a requirement that reduced sentences cannot take effect until November 1, 2015. Under the guidelines, no offender would be released unless a judge reviews the case to determine whether a reduced sentence poses a risk to public safety and is otherwise appropriate.

Congress has until November 1, 2014 to disapprove the amendment.Should Congress choose to let the guideline reductions stand, courts could then begin considering petitions from prisoners for sentence reductions, but no prisoners could be released pursuant to those reductions before November 1, 2015.

The year-long delay in implementation will allow judges more time to consider whether each eligible offender is an appropriate candidate for a sentence reduction and will give the government adequate time to object to sentence reductions when prosecutors believe public safety may be at risk. The delay will also give time for the federal Office of Probation and Pretrial Services to prepare for effective supervision of released offenders in the short term and will enable the BOP to ensure that each prisoner receives transitional services including placement in halfway houses to help increase the chances of successful reentry into
society. More information about the vote and amendments to the federal sentencing guidelines is available on the Commission’s web site at www.ussc.gov.

Case Summaries

General Information

(Chapter 1)

United States v. Purham 2014 WL 2566079 (7th Cir. 2014)
Defendant’s prior trafficking activity not relevant to sentencing

The defendant was arrested in Quincy, Illinois in 2006, for cocaine possession and was sentenced to 30 months of probation. While on probation, he continued to distribute crack cocaine, including transporting 1.8 kilograms of crack from Chicago to Quincy in 2008. His probation was revoked and he remained in Illinois custody until May 10, 2010. After being released from state custody, he resumed selling crack cocaine. In August 2010, he was arrested for unlawful possession of a firearm and was sentenced to three years in state prison. He pled guilty to federal conspiracy charges to distribute at lease 280 grams of crack cocaine, with the charge conduct running from July 2010 to November 2011. The PSR estimated the defendant was responsible for 1.9 kilograms of crack, which included the 1.8 kilos he had transported in 2008. Over the defendant’s objections, the district court adopted the PSR and its drug calculation. On appeal, the defendant argued that the 2008 drugs should not have been included in the drug amount total because the uncharged conduct was not sufficiently related to his offense of conviction. The Seventh Circuit noted that under §1B1.3, two offenses are part of the “same course of conduct where they are “connected or sufficiently related to each other as to warrant the conclusion that they are part of a single episode, spree, or ongoing series of offenses. They are part of a common scheme or plan if they are substantially connected to each other by at least one common factor, such as common victims, common accomplices, common purpose, or similar modus operandi.” In this case, the 2008 conduct was not part of the same course of conduct as the 2010 drug conspiracy to which the defendant pled guilty. The government failed to demonstrate “significant similarity, regularity, and temporal proximity” between the uncharged conduct and the offense. There was insufficient information related to the year-long gap between the relevant conduct and the offense of conviction. Further, the two offenses were not part of a common scheme or plan because the evidence was insufficient to show “common victims, common accomplices, common purpose, or similar modus operandi.” “The mere fact that the defendant has engaged in other drug transactions is not sufficient to justify treating those transactions as relevant conduct for sentencing purposes. Supplying cocaine to the residents of an individual city on two separate occasions, unlinked by common accomplices or a common modus operandi, does not link the two instances as relevant conduct under §1B1.3(a).”

Offense Conduct
(Chapter 2)

United States v. Murillo-Acosta 751 F.3d 682 (5th Cir. 2014)
Prior voluntary departure was deportation supporting enhancement under §2L2.2(b)(1)

The defendant pled guilty to using a fraudulent visa as proof of permission to enter the United States. The district court applied a two-level enhancement under §2L2.2(b)(1) based on a previous deportation. On appeal, the defendant argued that the enhancement did
not apply because while he had been in removal proceedings, the immigration court allowed him to voluntarily depart from the United States, such that he had not been deported for the purposes of §2L2.2(b)(1). The Fifth Circuit held that the enhancement applied to situations of voluntary departure, and the enhancement so specified that it applied to voluntary deportations.

The Third and Ninth Circuits recognized that voluntary departure supported the enhancement, and the Second and First Circuits have suggested that voluntarily leaving the United States, even without formal removal proceedings, may allow application of the enhancement. See United States v. Munoz- Valencia, 59 F. App’x 483 (3d Cir. 2003); United States v. Blaize, 959 F.2d 850 (9th Cir. 1992); United States v. Sentamu, 212 F.3d 127, 136 (2d Cir. 2000); United States v. Clase-Espinal, 115 F.3d 1054, 1058 (1st Cir. 1997). The sentence was affirmed.
United States v. Razo-Nunez 2014 WL 1979877 (D.C. Cir. 2014) Resentencing required because of mistakes of fact. The D.C. Circuit held that the defendant must be
resentenced in this supervised release violation case, as the district court sentenced him based on two mistakes of fact that impacted the sentence. The defendant was serving an unlawful entry sentence, impliedly had been deported, and subsequently reentered the United States, thus violating the term of supervised release he was serving for the first entry.
The district court’s mistakes of fact consisted of the following: First, although this was a supervised release violation in which U.S.S.G. Chapter 7 applied in calculating the sentence, the district court believed §2L1.2, applicable to unlawful reentry, was to be applied. As a result, the district court did not consider the defendant’s request for a reduced sentence based on his status as a deportable alien, as the district court believed his alien status was
inherent in the guideline. D.C. precedent required that a district court consider whether an alien’s sentence “fairly accounts for the severity of the situation he will face in prison,” and the district court did not consider this factor. Second, the district court believed the defendant had entered the United States for the third time; however, this was only the defendant’s second entry. The D.C. Circuit found these errors to be plain, and found that the district court’s reasoning was affected by these errors, such that resentencing was required.

United States v. Rangel-Guzman 752 F.3d 1222 (9th Cir. 2014)
Inadequate explanation regarding not applying twolevel reduction under 2D1.1(b)(16)

This matter was vacated and remanded for resentencing where the district court did not adequately explain the reasons for failure to apply the two-point safety-valve reduction pursuant to §2D1.1(b)(16). The defendant had been found at the border attempting to
bring in 91.4 kilograms of marijuana. Upon apprehension, he gave information to the agents
regarding the offense, but changed his story at trial. The government moved for an obstruction of justice enhancement, arguing that the defendant had told agents (and the AUSA) one thing, yet testified about another. The district court, while considering the obstruction enhancement, stated that he did not think the defendant had met all of the prongs of the safety valve reduction, and returned to considering the obstruction enhancement. Nothing more was said about the safety valve by the district court and the district court declined to impose the obstruction enhancement. The government conceded that the defendant had provided information during the investigation; the obstruction enhancement the government requested was based on the defendant’s trial testimony, not his prior statements. Where there was nothing in the record to explain why
the district court did not apply the safety valve reduction, the sentence was vacated and the matter was remanded for resentencing.

United States v. Adepoju 2014 WL 2809014 (4th Cir. 2014)
Government failed to establish sophisticated means; district court improperly shifted burden to

The defendant was convicted of bank fraud and aggravated identify theft and was sentenced to 70 months, based in part on the application of a two-level sophisticated means enhancement. The defendant had enlisted the services of another individual, who was a confidential informant (“CI”), in bank fraud. The defendant contacted the CI asking about any bank contacts. The CI claimed to have a bank vice-president contact, and the defendant instructed him to open an  account in a false name, withdraw funds and split the proceeds. The defendant provided IRS documents of an actual person (“T.A.”) to the CI for use in opening a personal account and a business account, and subsequently gave the CI forged checks in the amount of $28,000 and $70,500. Officers executed a search warrant on the defendant’s residence after he repeatedly asked the CI to withdraw the funds. At sentencing, the government moved for a sophisticated means enhancement. In response, the district court stated that “unsophisticated means involves something that an ordinary person, who wasn’t specially training in something, could get done,” then inquired of defense counsel how the defendant’s act of acquiring T.A.’s information was not sophisticated. Defense counsel explained that in today’s modern age, personal information can easily be obtained from simple internet searches and other methods, and that opening a bank account only required paperwork, not sophistication. The district court then noted that the absence of evidence that T.A.’s information was accessible from internet sources reinforced its view that sophisticated means were used and imposed the enhancement. On appeal, the Fourth Circuit held that the district court had impermissibly shifted the burden of proof as to the enhancement from the government to the defendant, by assuming the defendant had used sophisticated means to obtain the individual’s information, then requiring him to disprove that he did so. The court held that the facts “do not affirmatively indicate that he did anything especially intricate or complex to obtain T.A.’s information or attempt to defraud a bank.” The court found that there was no evidence to show that names, birthdates and social security numbers could only be obtained by sophisticated means, and the mere possession of this information did not alone demonstrate sophistication. Therefore, the enhancement was improperly applied based on the evidence in the record.

United States v. Lucero 747 F.3d 1242 (10th Cir. 2014)
Enhancement for pattern-of-activity involving sexual abuse or exploitation of a minor

The defendant worked as a social worker providing services to military veterans for the Veterans Administration. The Office of the Inspector General conducted a random search of the VA’s computer network and found child pornography on the defendant’s computer. During a subsequent interview, the defendant told agents that he had sexually molested two of his nieces in the late 1960s and early 1970s, received counseling after his family found out, and had no further incidents. The defendant pled guilty to three counts of receipt and two counts of possession of child pornography. The PSR calculated a sentencing range of 78 to 97 months, which included a five-level increase under §2G2.2(b)(5) because he engaged in a pattern of activity involving the sexual abuse of minors, including molesting his nieces. The district court adopted the PSR and imposed a sentence of 78 months. On appeal, the defendant argued that a time threshold should govern the applicability of the §2G2.2(b)(5) enhancement, and that it should also depend on some contextual relationship with the offense of conviction. Reviewing for plain error, the Tenth Circuit affirmed the sentence, holding that the plain language of the enhancement refuted both arguments. “We conclude the plain text of §2G2.2(b)(5) and its accompanying commentary unambiguously authorize sentencing courts to apply the pattern-of-activity enhancement regardless of when the conduct underlying it occurred. The guideline and the commentary do not include any
temporal limitations.” Further, “the commentary to §2G2.2(b)(5) [cmt. n. 1] makes clear that the pattern of activity need not be contextually related to the offense for which the defendant is being sentenced because it need not have occurred at the same time as the offense of conviction or involved the same minor.” The courtvnoted that it would have reached the same conclusion even under an abuse-of-discretion standard of review.

United States v. Isaccson 2014 WL 2119820 (11th Cir. 2014)

Losses from investment in group of hedge funds were not attributable to defendant

The defendant, along with others, participated in a complex scheme designed to defraud investors through a group of hedge funds. Through the hedge funds, the schemers invested in publicly-traded shell companies that had few if any assets, then drove up the share prices  by buying stock in the companies at artificially inflated prices. Over the course of several years, investors, including Morgan Stanley, invested in the funds. The defendant’s involvement in the scheme involved producing false and inflated valuation reports for the shell companies to give to the funds’ auditors. The auditors accepted the reports and the investors were given false information regarding the performance of the companies. The scheme ultimately fell apart and the defendant was found guilty of conspiracy to commit wire, mail, and securities fraud, and six counts of wire fraud. The PSR determined a loss amount of $7 million to $20 million, which included $15 invested by Morgan Stanley in 2002. This resulted in a 20-level increase and a sentencing range of 188 to 235 months. The district court imposed a sentence of 60 months, the statutory maximum. On appeal, the defendant argued that his sentence was unreasonable because the loss amount was not sufficiently attributable to his participation in the conspiracy. The Eleventh Circuit explained that, under §1B1.3, “a defendant is responsible for the conduct of his co-conspirators only if that conduct was in furtherance of the jointly undertaken criminal activity and reasonably foreseeable in connection with that criminal activity.” Before losses caused by a coconspirator’s conduct could be attributed to a defendant, the district court must: 1) “make individualized findings concerning the scope of criminal activity undertaken by a particular defendant” and 2) “consider whether the conduct of his co-conspirators was in furtherance of, and reasonably foreseeable in connection with, the criminal activity jointly undertaken by the defendant.” In connection with the first factor, “[t]he fact that the defendant knows about the larger operation, and has agreed to perform a particular act, does not amount to acquiescence in the acts of the criminal enterprise as a whole.” In this case, the government did not established that Morgan Stanley’s losses were the result of the defendant’s conduct in furtherance of the part of the conspiracy in which he agreed to participate. There was no evidence showing that Morgan Stanley relied on the false valuation reports prepared by the defendant. To the contrary, Morgan Stanley made its investment before the auditors had received the reports and had signed-off on the financial statements. “To say that Morgan Stanley’s investment resulted from the conspiracy to defraud the auditors would require a number of inferential leaps and assumptions not supported by the record. Therefore, we conclude that the link between the conspiracy to defraud the auditors and Morgan Stanley’s investment is too speculative to say the latter resulted from the former, as the Guidelinesrequire. The District Court clearly erred in concluding otherwise and [the defendant’s] sentence should not have been enhanced based on Morgan Stanley’s losses.”

United States v. Massam
2014 WL 1779232 (11th Cir. 2014)
Defendant not entitled to credit against intended loss

The defendant, an orthopedic surgeon, set up two pension plans to provide retirement benefits for himself and his employees. He served as the administrator and trustee for both pension plans. In 2005, the defendant and his fifth wife were divorced and the state court
entered two distribution orders allocating $452,242 of the pensions plans to his ex-wife. He attempted to improperly transfer all of the funds, a total of $1,185,862.32, from both of the pension plans, into a foreign bank account, but the bank wired the funds back because the defendant failed to adequately document their source. Soon thereafter, the defendant made several investments on behalf of the pension plans, including $350,000 with the Hanover Corporation, but this amount was entirely lost because the investment turned out to be an illegal Ponzi scheme. He appealed the final judgment in the divorce and posted a supersedeas bond in the amount of $656,341, which covered, among other things, the amount of the pension funds that he had been ordered to pay his ex-wife. The state appeals court affirmed the order and the defendant’s obligation to his ex-wife was satisfied from the supersedeas bond. Afterwards, when his employees had difficulty getting distributions from the pension plan, it was discovered that the defendant had stolen $502,977.69 from the pension. He pled guilty to theft and embezzlement of employee benefit funds and stipulated that he had unlawfully transferred $275,000 from one of the pension accounts to his personalaccount for his own use. The PSR calculated an intended loss amount of $772,768, which was $1,185,862.32 (the amount the defendant tried to transfer) less $413,095 (the amount left in the pension plan). The defendant argued that the amount should be offset by the $350,000 Hanover investment and the amount paid to his ex-wife from the supersedeas bond. The district court agreed with the first argument, but the reduction had no impact on the ultimate sentencing range of 30 to 37 months. The district court ultimately varied downward to a sentence of 24 months. On appeal, based on §2B1.1 cmt. n3(E)(i), the defendant argued that the district court should have allowed a credit against loss of $452,242, the amount of the supersedeas bond paid to his ex-wife. He contended that he had “returned” that amount before the fraud had been detected. The Eleventh Circuit disagreed, explaining that because “[a] credit against loss based on money returned is not available for intended loss alone. It is not available because the guidelines commentary concerning the credit requires that the money be returned to the victim . . . [and] a credit against loss requires a victim, which requires an actual loss, which does not exist when there is only intended loss. That is what the guidelines and their commentary mean, and a different rule would make no sense.” Further, his wife was not a “victim” of the defendant’s failed transfer of the pension funds because any loss the transfer could have caused her was undone when the bank transferred the money back. Therefore, the defendant was “not entitled to any credit against loss on the ground that his ex-wife was able to collect her interest in the pension funds from the supersedeas bond.”

United States v. Dougherty
2014 WL 2800791 (11th Cir. 2014)

Assaults against police officers were not during “immediate flight” under §3A1.2(c)

On August 1, 2011, the defendant was sentenced to a term of probation and was classified as a sex offender based on his sending sexually explicit text messages to a minor. He was required to wear an ankle bracelet and was placed on location monitoring. The defendant, his sister and his brother decided to flee to Mexico and earn money on the way by selling guns and robbing a bank in Georgia. After cutting off the ankle monitor and loading a car with
firearms and ammunition, the three left. A Florida police officer observed the car speeding and attempted to initiate a traffic stop, but was fired upon by a pistol and an assault rifle, which disabled the officer’s car. Later, the three entered the CertusBank wearing masks and sunglasses. All three were armed and two of them fired “warning” shots into the ceiling. They made off with $5,000 and subsequently drove through several states, eventually arriving in Colorado. Eight days after the robbery, the trio was recognized and led police on a high-speed chase, firing numerous times at police, until the car ran over spike strips and flipped over. All three ultimately pled guilty to various charges and each one was sentenced to 428 months. The sentence included a six-level enhancement under §3A1.2(c)(1), for assaulting a law enforcement officer and creating a substantial risk of death or serious bodily harm during immediate flight. The district court determined that continuous flight was equivalent to immediate flight and, since the defendants were continuously fleeing from the bank robbery for eight days, the enhancement for immediate flight should apply. On appeal, the defendants argued that the enhancement did not apply because the assault in Colorado occurred, not during “immediate flight,” but several days later. The Eleventh Circuit agreed, finding that the ordinary meaning of “immediate flight” meant “occurring with delay; instant.” Here the defendants’ “assaults against the police officers in this case, occurring eight days after,
and thousands of miles and several states away from the Georgia robbery, no matter how disturbing or egregious, do not meet the ordinary meaning of the term ‘immediate.’ We find that the district court improperly applied the six-level enhancement under §3A1.2(c).”

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